2016 (12) TMI 1368 - AT - Customs

Unjust enrichment - Held that - the price of the final product manufactured by the appellant was the same as the price of the other manufacturers/suppliers. Therefore, incidence of duty was not included in the price of the final product and was not passed on to any other person - reliance placed in the decision of the case of Commissioner of Customs (Import) v. Pudumjee Plant Laboratories Ltd. 2007 (10) TMI 196 - HIGH COURT BOMBAY , where it was held that if the price of the final product of the assessee is matching with the price of the other sellers in the market, the duty element cannot be said to have been passed on to the customers - the facts and the issue considered in the said judgment was not before the lower authority. Therefore, in our view the matter needs to be remanded. We remand the matter to the original authority for reconsideration of the whole issue in the light of the judgment of the Hon ble High Court in the case of Pudumjee Plant Laboratories Ltd. - appeal allowed by wy of remand.

Summary

Issues:
- Benefit of Notification No. 155/86-Cus denied by the department
- Doctrine of unjust enrichment in relation to capital goods
- Burden of proof on the assessee to show duty incidence not passed on
- Applicability of judgments in similar cases
- Remand for reconsideration based on Bombay High Court judgment

Analysis:
The appeal involved a dispute regarding the benefit of Notification No. 155/86-Cus, which was denied by the department. The appellant imported capital goods and claimed a refund of duty, which was initially sanctioned but later ordered to be credited to the Consumer Welfare Fund due to the doctrine of unjust enrichment. The appellant argued that the capital goods were used captively and not sold, thus the duty incidence was not passed on. The appellant cited judgments, including the Madras High Court and Bombay High Court decisions, to support their argument. The Revenue contended that the burden of proof lies on the assessee to show that duty incidence was not passed on, which was not discharged in this case.

The Tribunal considered the submissions and noted that the price of the final product manufactured by the appellant was similar to other manufacturers, indicating that duty incidence was not included in the price. The Tribunal found that the issue considered in the Bombay High Court judgment was not before the lower authorities, necessitating a remand for reconsideration in light of the relevant judgment. Therefore, the Tribunal allowed the appeal by way of remand for a reasoned order based on the Bombay High Court decision.

This judgment highlights the importance of the doctrine of unjust enrichment in cases involving the refund of duty on imported goods, especially concerning capital goods. It emphasizes the burden of proof on the assessee to demonstrate that duty incidence was not passed on to any other person. Additionally, it underscores the significance of citing relevant judgments to support legal arguments and the possibility of remand for reconsideration based on new legal precedents.